Recent Developments

The company announced positive interim data from an early stage clinical trial testing one of its cancer drugs, ALG.APV-527. It is also planning to start another clinical trial soon to test one of its other cancer drugs, APVO436, in combination with two existing cancer drugs.

In April, the company raised $4.6 million by selling stock to healthcare investors. This provides funding for its research programs.

Comparison of Financial Results

Research and Development Expenses

These expenses relate to conducting clinical trials and research studies. Key points:

• Expenses decreased by $0.4 million compared to last year
• Decrease was primarily due to concluding one clinical trial (APVO436) and lower preclinical research expenses
• Partially offset by higher expenses for the ALG.APV-527 clinical trial

Drug (thousands)	2024	2023
APVO436	$684	$1,048
ALG.APV-527	$827	$702
Preclinical research	$2,241	$2,418
Total	$3,752	$4,168

General and Administrative Expenses

These expenses support executive, finance, IT, legal and other administrative functions.

• Expenses decreased by $0.4 million due to lower employee and consulting costs

Other Income, Net

Primarily consists of interest income and expense.

• Changed to income of $0.2 million from expense of $0.1 million
• Due to repaying debt last year

Discontinued Operations

• No income from discontinued operations this quarter
• Last year there was $0.9 million of income related to past business sale

Cash Flows and Financial Condition

Category (thousands)	2024	2023
Operating activities	$(6,651)	$4,566
Investing activities	$0	$0
Financing activities	$(3)	$(1,873)
Change in cash	$(6,654)	$2,693

• Used $6.7 million in operations this quarter, compared to generating $4.6 million last year
• Change mostly due to net loss this quarter versus net income last year

Funding Sources

The company has several potential sources of funding:

• Milestones from IXINITY sale: Up to $5.8 million based on sales and regulatory milestones
• Warrants from stock offerings: If all outstanding warrants are exercised, could provide up to $17 million

However, additional funding will be needed to complete clinical trials of its drug candidates.

Future Outlook

The company expects to continue incurring losses given its early stage of drug development. Additional funding will be needed to:

• Complete clinical trials
• Establish partnerships
• Support operations

There are risks around:

• Raising additional capital
• Hiring and retaining key talent
• Progress of clinical trials
• Results from preclinical and clinical studies
• Protecting intellectual property
• Macroeconomic conditions like inflation and supply chain issues

However, the company has several promising cancer drugs in early testing and multiple opportunities to raise capital through partnerships, stock offerings and warrant exercises.